Charter Operators Face Challenges in 'Scaling Up'

The pace at which the highest-performing charter-management organizations are “scaling up” is being determined largely by how rapidly they can develop and hire strong leaders and acquire physical space, and by the level of support they receive for growth from city or state policies, say leaders from some charter organizations viewed by advocates as successful.

From the 1999-2000 to 2008-09 school years, the number of students enrolled in charter schools more than tripled, from 340,000 to 1.4 million, according to the National Center for Education Statistics. The proportion of all public schools that are charter schools more than doubled, from 2 percent to 5 percent, during that same period, but that growth has not been uniform across the country.

To explore what might be obstacles to growth for successful charter operators, Education Week interviewed leaders of five of the seven charter-management organizations, or CMOs, in the NewSchools Venture Fund’s portfolio that the fund sees as producing the best student-achievement results.

As might be expected, some of the charter operators identified by charter supporters to have the strongest records in student achievement are focusing their expansion in cities or states that have policies viewed as friendly to charter schools, such as New York City and Newark, N.J., and are steering away from locations viewed as unfriendly. Legislation passed in the last year that relaxed limitations or lifted caps on opening charter schools in Illinois, Indiana, North Carolina, and Tennessee will benefit charter operators that want to expand, said Chad A. Miller, the senior director of federal advocacy for the Washington-based National Alliance for Public Charter Schools.

Policies that make it easy for charter schools to acquire free or low-cost facilities or that ensure such schools get the same per-pupil funding as regular public schools are a big draw. The presence of Teach For America, an alternative teacher-preparation program, is also attractive to charter operators.

Charter schools are publicly financed but largely independent of the regular school system. Some are single-site schools run by small, local groups; others are part of growing regional or national networks operated by CMOs.

Charter Territory

Charter-management organizations that were operating at least two schools in 2007 were concentrated in 18 states and the District of Columbia. CMO leaders say they are scaling up in several states where they view policies to be charter-friendly.

SOURCE: Center on Reinventing Public Education

Not everyone thinks that policies that make it easier for charter operators are fair.

On July 25, a group of public school parents, backed by advocacy groups, filed a lawsuit in a New York trial court arguing that charter schools should be required to pay for the use of public school buildings.

Leonie Haimson, the executive director of Class Size Matters, a New York City-based nonprofit organization that is backing the lawsuit, contends that the city’s education department is breaking state law by not providing space and services to charter schools at cost.

“Their expansion is undermining the quality and resources of our regular public schools,” she said, “Meanwhile, our public school students are experiencing larger class sizes, are losing access to art, music, and science rooms, are losing their libraries, and increasingly, special-needs students are getting their services in hallways, closets, and stairwells.”

Also, on Aug. 2, North Carolina’s court of appeals stood by a lower court’s decision that charter schools aren’t entitled to the capital funds that traditional public schools receive in response to a lawsuit filed in 2009 by seven charter schools seeking access to such funds. The appeals court ruling said the matter should be determined by legislative action rather than judicial decision.

But a New York state judge had a different perspective in ruling last month on a separate lawsuit that the United Federation of Teachers, the NAACP, and other groups, had filed in June. That suit contested the closing of some 22 public schools and the planned “co-location” of 16 new charter schools into buildings that are now the home for traditional public schools. The judge sided against the plaintiffs by dismissing a preliminary injunction to block the New York City district’s plan.

“It’s a bit ironic that going back two decades ago, the earliest advocates for charters claimed that the education sector had been taken over by special-interest groups, like the unions,” reflected Bruce Fuller, a professor of education and public policy at the University of California, Berkeley, who studies charter schools. “Fast forward 20 years later, and it’s the charter lobby that has captured the hearts and minds of politicians and the charter lobby that’s pushing for favorable treatment.”

Hospitable Environments

Boston and Milwaukee have recently moved from the “unfriendly” list to the “friendly” list in terms of being hospitable to charter operators, while California, because of its persistent budget crisis, is seen by charter operators as offering an increasingly challenging environment for expansion. One CMO that opened its first schools in Connecticut has ruled out opening new schools in the Constitution State in favor of opening new schools in nearby New York City.

“The bottom line for charter-management organizations is, wherever they operate, they want to get the same per-pupil funding as traditional school districts,” said Deborah McGriff, a nonprofit partner for the NewSchools Venture Fund, in San Francisco, which finances the replication of charter schools by CMOs it deems high-performing.

The expansion of high-quality charter schools isn’t only of interest to private funders, such as the NewSchools Venture Fund. The U.S. Department of Education operates a grant program with the same mission; the program gave out $50 million in fiscal 2010, its first year, and is expected to provide $25 million for that purpose in fiscal 2011. The department released final priorities for the program July 12.

The $50 million last year was given to a dozen charter operators that said they would open 127 new schools and expand 31 others.

The federal competition has maintained its requirement from its first year that grants will be given only to charter operators that have experience running more than one high-quality charter school. The Education Department tweaked the priorities for the competition for fiscal 2011, which ends Sept. 30, and later years to spell out for the first time that it will give preference to charter operators that demonstrate a record of enrolling a diverse group of students, including students with disabilities and English-language learners.

The upcoming report from the Center on Reinventing Public Education includes findings that charter-management organizations are opening schools in only a small number of states. Robin Lake, the associate director of the center, said that “a big part of that is whether states have hospitable policies.”

Currently, the average nationwide per-pupil funding rate for charter schools is about 80 percent of the rate for regular public schools, according to Ms. McGriff, who was the general superintendent of Detroit Public Schools from 1991-1993. She cited the identification of high-quality teachers and principals as the biggest factor setting the pace for growth of high-performing charter operators, with the ability of charter operators to pay for school buildings as a close runner-up.

Even though Rocketship Education, based in Palo Alto, Calif., runs only three schools, the strong student outcomes for those schools, which serve only K-5 students, and the program’s promise to yield financially sustainable schools have attracted recruiters from halfway across the country.

Rocketship’s Expansion

Aylon Samouha, the chief schools officer for Rocketship Education, said a team of politicians and educators from Milwaukee, including the city’s mayor, a charter authorizer, and a representative from Teach For America, visited Rocketship’s schools in San Jose, Calif., to try to recruit Rocketship to Milwaukee.

Mr. Samouha said Rocketship Education is considering opening schools in that city, as well as in Chicago, New Orleans, and Newark. It has applied for charters in California’s Santa Clara County and in the cities of East Palo Alto, Oakland, and San Francisco.

It will cost $2.5 million to $3 million for the charter operator to open a cluster of eight schools in a particular location over five years, and after that the schools will be financially sustainable, according to Mr. Samouha.

The charter operator saves money on teachers’ salaries by having students spend only four hours a day in classrooms, where the teachers are expected to work with them on higher-order skills, and two hours a day in a learning lab, where they work on their basic skills with the help of computer software and small-group learning with teachers.

The Rocketship CMO won’t open schools in any location unless Teach For America has a presence there, Mr. Samouha said. Seventy-five percent of the charter operator’s teachers are members or alumni of TFA, a program that trains recent graduates of top colleges for stints as teachers in high-need schools.

“We’ve got to go where we can get the most quality in one swoop, and that happens to be Teach For America, both for teachers and future school leaders,” Mr. Samouha said. He defined quality, in part, as “people excited about education reform.”

Rocketship Education plans to open two more schools this coming school year and aims to be running some 200 schools across the country by 2020. Developing strong teachers and leaders and acquiring physical space are challenges to Rocketship’s growth, Mr. Samouha said. Equally challenging is getting charter authorizers to agree to a charter to open eight schools over five years in one location, which is how Rocketship plans to proceed with growth, Mr. Samouha said.

Beyond California

The Los Angeles-based Green Dot Public Schools, which has already scaled up considerably since launching its first charter school in 2000, is also being recruited outside California.

“Governors have called me begging me to get Green Dot in their states,” said Marco Petruzzi, the president and chief executive officer of Green Dot. The organization’s first school served 140 9th graders. This coming school year, the CMO is set to operate 21 schools with 10,000 students in Los Angeles.

That level of enrollment marks a significant growth spurt, even over this past school year, when 8,300 students were enrolled in Green Dot schools. (Green Dot considers some of its campuses to have several schools on them.)

While Green Dot initially opened mostly independent charter schools, the organization now has a strong focus on “turnarounds” of low-achieving schools, setting it apart from the other charter leaders interviewed for this story. Most charter operators have deliberately steered away from trying to improve existing schools in favor of starting new ones.

Mr. Petruzzi said that developing and hiring principals and coping with what educators view as California’s low per-pupil student funding—set to be less than $6,000 per pupil for charter schools this coming school year—are the top barriers Green Dot faces in scaling up. Also, he said, persuading the Los Angeles Unified School District to turn over schools and buildings to Green Dot is increasingly a challenge.

But Monica Carazo, a spokeswoman for the 672,000-student Los Angeles Unified School District, said the district complied with all four requests for buildings made by Green Dot schools for the 2011-12 school year.

Green Dot has plans to scale up to serving 15,000 or 16,000 students in Los Angeles by 2015, according to Mr. Petruzzi. Its involvement outside of Los Angeles so far extends only to a school in the Bronx borough of New York that it doesn’t officially operate.

Seeking Friendly Climates

Aspire, in Oakland, has also focused so far only on California. It opened its first charter school in Stockton, Calif., in the 1999-2000 school year and has grown by several schools each year. The CMO operates 30 schools and has nearly doubled its enrollment, to 12,000, over the past three school years.

James Willcox, the chief executive officer of Aspire, said the difficult budget climate in California is causing him and other Aspire leaders to think about opening schools outside the state.

“It’s getting harder and harder to do quality schools in California,” he said, “because the funding is so painfully low, and charter schools get less per student than traditional public schools.”

About 10 percent of the charter network’s $100 million budget is provided by private philanthropy, he said.

Meanwhile, the charter operator Achievement First, which opened its first charter schools in Connecticut in 1999, has decided that its second home, New York City, has policies that are more welcoming for charter schools. The organization has decided to abandon further growth in Connecticut unless that state changes its policies, said Dacia Toll, one of the founders and the co-chief executive officer for the network.

New York is a draw because the city’s school system is providing charter operators with school buildings for free or at a low cost, she said.

Funding Differences

The per-pupil rate for charter schools in New York City is $13,500, the same rate as for regular public schools. By contrast, Connecticut gives charter schools 75 percent of the per-pupil rate that it gives regular schools, Ms. Toll said, and the money comes from a separate stream of funding for charter schools that has been flat for four years.

Achievement First’s charter schools in New York City are financially sustainable after an investment of between $500,000 and $750,000 for startup costs, but that’s not the case in Connecticut, where the charter operator’s schools need the support of philanthopic funding to stay open, Ms. Toll said.

Achievement First opened its first school in Bridgeport 12 years ago and now has 10 charters (some that include several schools), which are expected to enroll 6,200 student in the 2011-12 school year.

But Eva Moskowitz, the head of Harlem Success Academy Charter School, indicated that opening charter schools in New York City is no picnic when she spoke at a session about scaling-up at the annual conference of the National Alliance for Public Charter Schools, held in Atlanta in June.

Her organization has been sued over facilities issues in the lawsuit filed in June by the United Federation of Teachers and civil rights groups.

“When I open new schools, they say I’m empire-building. I’m a chain,” she said of her critics. “I’m only at nine [schools].”

Ms. Toll said that Harlem Success is likely experiencing more difficulty than Achievement First to get physical space in New York because it seeks to use buildings in Harlem, where space is at more of a premium than it is in the Brooklyn neighborhoods where Achievement First has launched schools.

In comparison, the charter operator on the NewSchools Venture Fund’s top-performing list that has grown in the most locations is the Knowledge Is Power Program, or KIPP. A KIPP school opened both in Houston and New York City in 1995, and since then, the network has grown to 109 schools in 20 states and the District of Columbia. KIPP leaders expect to expand the network from its current enrollment of 27,000 students to 55,000 by 2015, said Richard Barth, the CEO of the KIPP Foundation, in San Francisco.

“This is very hard work. There’s no silver bullet,” he said. “Human capital is the number-one challenge.”

Mr. Barth said KIPP is focusing on growing the number of schools and students served in the charter-friendly locations where it is already present, rather than opening schools in new locations. That means significant scaling up in Atlanta, the District of Columbia, New Orleans, and Newark.

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